June 8, 2015
Going international? Pack your global competitive advantage.
Vancouver, BC--The concept of global competitive advantage is the main finding of a report issued today, titled ‘Selling to the World: The Keys to International Business Success’, and its companion case studies of 20 globally successful companies from across Canada, commissioned by HSBC Bank Canada from The Conference Board of Canada.
Linda Seymour, executive vice-president and head of commercial banking, HSBC Bank Canada, says: "Doing business internationally requires the right mix of people, skills, effort, and circumstance to give you the best shot at success – and even then, there's no guarantee. This research and the accompanying case studies offer a unique combination of blueprint for Canadian companies with plans to grow internationally, and concrete examples of what success looks like from the inside."
Despite over 40 free trade agreements in place for Canadian internationally-minded companies to leverage, there is still plenty of room for new players. In fact, only 10 per cent of Canadian companies generate sales abroad and just 550 firms account for 70 per cent of Canadian goods exported. By contrast, the remaining 30 per cent is generated by nearly 40,000 firms.
While Canadian companies struggle to grow with a tepid economy at home, a low Canadian dollar favours export-oriented firms and more Canadian companies are eyeing international markets for their products or services.
Frederic Dugré, CEO of H2O Innovation, says: "Our international strategy relies on the identification and nurturing of committed, local partners to whom we entrust the care of our innovative products and brand. More specifically, sharing such technical knowledge with our local partners enables them to create sophisticated solutions for sophisticated customers locally, and that's where the market really sees the value-added in our products."
By definition, a global competitive advantage is difficult to imitate, so companies must go about creating theirs in their own way. Succeeding internationally requires differentiation by offering unique products to niche markets. A global competitive advantage also takes on a life of its own through deft handling of a number of moving parts, and our research has boiled down some straightforward ways to craft theirs:
1. Know thyself. Stand out from the crowd with noteworthy technology, products, or business culture.
2. Go big or go home. Take calculated risks.
3. Get out there. Knowing the culture of foreign markets is invaluable.
4. Focus on meeting your customers' needs. Get to know international customers' buying culture well.
5. Adapt. Be ready to tailor products and services to your target foreign markets.
6. Learn the art of local. Maintain a local office or find a committed in-country partner.
7. Be ready to innovate. Embrace R&D and technology investments.
8. Make use of helping hands. Relationships with trade offices, customers, a trusted financial partner and other service firms go a long way.
As HSBC research continues to demonstrate that economic growth is taking place in emerging markets, the time is ripe for Canadian companies seeking new growth to consider what venturing beyond our borders and traditional trade routes can do for them.
A copy of the report and accompanying case studies are available at: www.hsbc.ca/connectingforgrowth